LO 3.1A companyâ€™s product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin ratio?

10%

40%

60%

90%

Question

Business

Lexie Hubbard

27 April, 02:45

LO 3.1A companyâ€™s product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin ratio?

10%

40%

60%

90%

+3

Answers (1)

Know the Answer?

Kelvin Ray · Answer 1

60%

Explanation:

Contribution margin ratio is calculated by dividing the contribution margin amount by sales.

Contribution margin is sales less variable cost to produce a product.

Sale price 150

Variable cost (60)

Contribution margin 90

Contribution margin ratio: 90 / 150 = 60%

LO 3.1A companyâ€™s product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin ratio?10%40%60%90%

LO 3.1A companyâ€™s product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin ratio?

10%

40%

60%

90%